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Tuesday, July 27, 2010

China International Fund in Africa: Another Failed Project

Once again, the murky Hong Kong company China International Fund (CIF) shows that it "talks the talk" but can't "walk the walk". The East African reports that a project under discussion for four years to partner with China Sonangol [CIF's joint venture with Angola's state-owned oil firm Sonangol] to revive Tanzania's state airline, Air Tanzania, remains moribund. Air Tanzania is threatening to partner with Air Zimbabwe now. Hmmm.Thanks to Henry Hall for the tip.

This project is one of those discussed in the July 2009 "88 Queensway Group" investigative report on CIF by the U.S.-China Economic & Security Review Commission. They reported that the "Tanzanian oil company grants China Sonangol [the joint venture] 3 licenses for oil exploration after it purchases 49 percent of Air Tanzania." This deal later appears to have fallen apart after protests that it violated Tanzania's rules on open tenders. No oil licenses, no partnership.

There are going to be a lot more failed projects as Africa wakes up to China's zero-sum mentality, and the Chinese themselves learn that doing business with governments that have no interest in helping their own people comes at a price.

Word is that Sonangol wants to buy BP's assets on East Africa, at a low price. And is trying to buy BP's jet fuel business at Dar international airport.

They - Sonangol - need to do some diligent searching... BP owns nothing at the Tanzania airports, and BP does not have a jet fuel concession agreement selling jet in Tanzania. If the deal goes through, ... murky at best.

Just to share an interesting article in The Economist; "The Queensway syndicate and the Africa trade"...an ongoing investigation which is going to lead many questions to be answer for China as well as for Africa...